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Nigeria has made the significant decision to divide the OPL 245 oil block into four separate blocks, which will be allocated to Eni and Shell.
This move marks a resolution to nearly three decades of legal disputes over one of the country’s most lucrative oil fields, which has been stalled despite its estimated recoverable reserves of approximately nine billion barrels.
According to sources cited by Reuters, the final agreements for this restructuring could be signed as soon as this week, allowing for operations to finally begin on a field that has remained undeveloped for decades. The financial stakes are high, as Abuja aims to benefit from the development of a field that could significantly boost state revenue.
OPL 245 became notorious for its role in a 2011 deal that saw Nigeria lose an estimated $5.86 billion in government revenue, according to a study by Global Witness. This loss was based on an average oil price of $70 per barrel, and the NGO calculated that Nigeria only retained 41% of the revenues, far below the expected 65%-85% for a mature producing country. The shortfall is equivalent to nearly twice the combined annual budgets for health and education.
The division of OPL 245 is intended to clarify legal responsibilities, secure the assets, and pave the way for its development. The restructuring aims to resolve the legal and contractual issues that have hindered the oil field’s potential, while also boosting Nigeria’s revenue amidst growing fiscal pressures.
The saga surrounding OPL 245 has been marked by corruption allegations and litigation. The block was initially awarded to Malabu Oil in 1998, a company linked to Dan Etete, a former oil minister under General Sani Abacha’s regime. Shell later joined the project, confirming the field’s value with two major discoveries.
However, ownership disputes and legal battles followed, both in Nigeria and internationally. A $1.3 billion deal in 2011 transferred the block to Eni and Shell, but Italian prosecutors later accused the companies of diverting funds to political figures and intermediaries. Although the charges were dropped, the dispute persisted.
OPL 245 returned to state control in January 2017 while the Nigerian government sought a way to resolve the issue without reopening past disputes. The latest decision to split the block into four separate units is a fresh start that could finally unlock its development. While the restructuring does not erase the past losses or the scandal’s legacy, it offers a path forward for Nigeria’s oil sector.
The success of this new plan will hinge on the government’s ability to negotiate new contractual terms and ensure transparency and oversight are in place to avoid past mistakes. This move represents a significant step towards ending the long-running saga and developing OPL 245.
